Re: USDA vs FHA

USDA has stricter criteria. You need to be purchasing in a USDA-eligible area, and your income has to be below a specific limit, according to the size of your family. See the rural development website for more. (rurdev.usda.gov)

In terms of qualifying credit scores, my mortgage broker explained it to me this way: There may be exceptions to minimum FICOs, but you want to avoid them if at all possible. It makes underwriting more difficult, and there's no guarantee of the mortgage going through. That said, you should be in good shape with:

620+ FHA (minimum 3.5% down payment)

640+ USDA* (no down payment, but a 2% guarantee fee that you can roll into principal)

660+ FHA 203(k), aka the home improvement mortgage. Borrow an amount based on house + repairs and finance renovations to a fixer-upper directly in mortgage. Also has 3.5% minimum down payment.

*This is for the usda guarantee mortgage (low-moderate income). There's also a usda direct mortgage program (w/ lower income limits). I don't qualify, so I didn't bother to learn much about it.

Re: USDA vs FHA

Keep in mind what lenders are telling for scores are usually the lenders min.. FHA for example is 580 with 3.5 % down and I believe even lower with more money down but most lenders won't go under 620 but a couple will so its not FHA or USDA..

Re: USDA vs FHA

Thanks now, in my situation, the house I want costs 220K. I have one card which I'm making payment on. I've never been late since I own this card but I've had a tons of collections in the past. My last late payment occurred 4 years ago. In my credit report only 2 collections are showing outstanding.

Brighthouse $312

Medical $368

both were assigned in 2008, do you think I should pay these two and forget about the rest.?

EX: 590

TU: 592

EQ: 631

One more thing, if i keep paying my only card and keep the balance as low as possible do you think in 4 months my credit score will reach 620 on EX and TU?

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IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more

FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.